Nearshore Americas

CITY PROFILE: Montevideo Sets Sights on Finance & Accounting Niche

Consistently ranked first among Latin American countries in The Economist Intelligence Unit’s Democracy Index, the Global Peace Index and the Prosperity Index, it is unsurprising that Uruguay is an attractive destination for nearshore business process outsourcing (BPO). Its capital, Montevideo, which houses almost half of the country’s 3.3 million people, is the heart of the growing industry – and is setting its sights on expanding its shared services sector and growing interest in Finance and Accounting Outsourcing (FAO).

Nadine Servan, Executive at government investment promotion agency Uruguay XXI, which runs the Uruguay Smart Services online portal, said that although there are some successful Third Parties Providers such as TCS or EGS, Montevideo is positioning itself as a top destination for Captive Services Centers like the recent BASF Services Americas shared service center for finance, announced in May 2014.

In a statement in Uruguay XXI’s promotion material, Berthold Ebner, Managing Director of BASF Services Americas, said: “Our project concerns in centralizing in one single country all BASF´s accounting services for the Americas: from Alaska to Patagonia. We decided for Uruguay, mainly because of three major elements.”

The first element, according to Ebner, is the State, which “must have an established economy and society, easy for doing business, to be free, without bureaucracy, and low levels of crime or corruption society.” The second element is that, “for the services we provide in data transporting, we need the right equipment and technology, powered by quality and uninterrupted traffic. And Uruguay can certainly provide it.”

Ebner went on to say, that, finally, the most important issue is people, “because this service depends on people. In Uruguay we found a very strong source of professional talent, thanks to their universities that form each year a significant number of very well prepared people. These set of factors conform what we were looking for, and we are convinced every day that Uruguay was a very good choice.”

Servan noted: “Our main challenges are to achieve a better recognition of Uruguay’s value proposition and consolidate after-care instruments like Finishing Schools and Smart Talent.

Valentina Sena, a BDM at KPMG Uruguay’s Shared Services and Outsourcing practice, explained that, despite its small size, Uruguay has emerged as an innovative services platform in Latin America. “Although it might not be seen as a top-of-mind option for global services, the country [and in particular, Montevideo] has proven to be an excellent option due to numerous factors: clear rules for investors, political stability, skilled and multilingual workforce, tax exemptions, quality of life and competitive costs,” she said.

Sena added that although Uruguay can work as a valid option for any kind of BPO center, KPMG believes that there is an interesting niche for Global Finance and Accounting BPO providers. “This is quite relevant if we bear in mind that almost 30% of the major buyers of services intend to increase their F&A outsourcing along 2015, according to a study conducted by HfS Research in conjunction with KPMG,” she said.

“A very important portion of our labor pool is represented by F&A resources and, specially, by F&A undergrad students willing to start working during the first years of college. The mix between these well-educated and relatively low-cost resources with the tax exemptions offered by the Uruguayan free trade zones, could result in a perfect combo for a F&A BPO provider.”

However, Sena noted, it is not only about cost saving. “There is a global trend towards more value-added BPO services and Uruguay is prepared to make a real difference in that sense,” she said, adding that, despite the small population of the country, the talent pool is qualified enough to provide high value end-to-end BPO services.

“Notwithstanding this, in order to secure a sustainable growth as a BPO destination, the Uruguayan Government needs to continue ensuring a talent pipeline with the skills needed, by working more strongly and closely with local universities and the private sector,” Sena said. “It also needs to continue with the development of training programs, such as the already implemented Finishing Schools, which are a great tool, highly valued by the global services companies.”

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The Facts

  • In Uruguay, most of the population and labor force is concentrated in Montevideo metropolitan area (61%), and all global services companies are located in this city.
  • Montevideo is 36th in the 2013 Tholons ranking of the 100 preferred destinations by companies that provide global services and fifth among Latin American cities.
  • Number of FTEs (full-time equivalents) employed in business services and IT: 59.454
  • FTEs in Call Center Services: 7.684
  • FTEs in Non-Voice Business Process (trading, supply chain, F&A etc): 35.316
  • FTEs in IT (IT application development, maintenance and infrastructure): 16.454
  • The number of Business Services operations (Regional Headquarters, SSC´s, Call & Contact Centers) is about 65; offshoring financial services are not considered in this number, representing another 40 companies.
  • 70% of business service operations are “in house” or captives, focused on supply chain, finance & accounting or HR.
  • The other 30% are third parties operations, mainly call & contact centers and back-office services like TCS or IBM.
  • Near 50% of the operations have less than 50 FTEs, 30% between 51 and 300; and 20% more than 300 FTE. The largest operation counts 1300 FTE.

Bianca Wright

Nearshore Americas Contributing Editor Bianca Wright has been published in a variety of magazines and online publications in the UK, the US and South Africa, including Global Telecoms Business,, SA Computer Magazine, M-Business,, Business Start-ups, Cosmopolitan and ComputorEdge. She holds a MPhil degree in Journalism from the University of Stellenbosch and a DPhil in Media Studies from Nelson Mandela Metropolitan University.

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